DoD awards $21.4M for H-53 helicopter modifications, raising questions on value and competition

Contract Overview

Contract Amount: $21,438,959 ($21.4M)

Contractor: Adams Communication & Engineering Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-08-06

End Date: 2015-09-16

Contract Duration: 1,136 days

Daily Burn Rate: $18.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER UNDER RAPID RESPONSE 3RD GENERATION IDIQ MULTI AWARD CONTRACT FOR MODIFICATIONS TO THE H-53 HEAVY LIFE HELICOPTER.

Place of Performance

Location: WALDORF, CHARLES County, MARYLAND, 20602

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to ADAMS COMMUNICATION & ENGINEERING TECHNOLOGY, INC. for work described as: TASK ORDER UNDER RAPID RESPONSE 3RD GENERATION IDIQ MULTI AWARD CONTRACT FOR MODIFICATIONS TO THE H-53 HEAVY LIFE HELICOPTER. Key points: 1. Contract value appears moderate for specialized engineering services. 2. Competition dynamics suggest potential for price discovery, but specific details are limited. 3. Performance risk indicators are not immediately apparent from the provided data. 4. Contract duration is substantial, requiring sustained oversight. 5. Sector positioning is within the defense aerospace engineering services market. 6. The contract type (Cost Plus Fixed Fee) can introduce cost escalation risks.

Value Assessment

Rating: fair

The contract value of $21.4 million for engineering services related to H-53 helicopter modifications is a significant investment. Benchmarking this against similar specialized aerospace engineering contracts would be necessary to determine true value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed tightly. Without detailed cost breakdowns or comparisons to industry standards for H-53 modifications, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. The data does not specify the number of bidders, which is crucial for understanding the intensity of competition. A robust competition with multiple bidders typically leads to better pricing and innovation. The absence of this detail limits the assessment of how effectively competition drove value.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through market forces. However, the ultimate benefit depends on the number of actual bids received and the government's negotiation strategy.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Army, through the enhancement of their H-53 heavy lift helicopter fleet. Services delivered include engineering and technical support for modifications to these critical aircraft. The geographic impact is likely concentrated around military bases and maintenance facilities where the H-53 helicopters are operated and serviced. Workforce implications include employment for specialized engineers and technicians involved in aerospace modification and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may lead to cost overruns if not closely monitored.
Lack of specific bidder count in competition data hinders full assessment of price discovery.
Long contract duration (1136 days) requires sustained performance monitoring and risk management.
Potential for scope creep in modification projects if not clearly defined and controlled.

Positive Signals

Awarded under Full and Open Competition, suggesting a broad search for qualified contractors.
Contract addresses critical sustainment and modernization needs for a key military asset.
Engineering services are essential for maintaining the operational readiness of heavy lift helicopters.

Sector Analysis

This contract falls within the Defense Aerospace Engineering Services sector, a specialized market focused on supporting military aircraft. The industry is characterized by high technical barriers to entry, stringent quality requirements, and significant government spending. Comparable spending benchmarks would involve analyzing other contracts for helicopter modifications, avionics upgrades, and structural engineering services for similar heavy-lift platforms within the DoD.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no mention of small business set-asides. This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this summary. The impact on the small business ecosystem would depend on whether prime contractors engage small businesses for specialized components or services.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers, program managers, and potentially the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is generally facilitated through contract databases, though detailed cost and performance reports may be restricted. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

H-53 Helicopter Sustainment Programs
DoD Aviation Maintenance Contracts
Aerospace Engineering Services
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Cost Plus Fixed Fee contract type
Limited competition details provided
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to ADAMS COMMUNICATION & ENGINEERING TECHNOLOGY, INC.. TASK ORDER UNDER RAPID RESPONSE 3RD GENERATION IDIQ MULTI AWARD CONTRACT FOR MODIFICATIONS TO THE H-53 HEAVY LIFE HELICOPTER.

Who is the contractor on this award?

The obligated recipient is ADAMS COMMUNICATION & ENGINEERING TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $21.4 million.

What is the period of performance?

Start: 2012-08-06. End: 2015-09-16.

What is the track record of Adams Communication & Engineering Technology, Inc. with similar DoD contracts?

Adams Communication & Engineering Technology, Inc. (ACET) has a history of performing various engineering and technical services for the Department of Defense. Analyzing their past performance on contracts of similar size, scope, and complexity, particularly those involving aircraft modifications or specialized engineering, is crucial. A review of their contract history would reveal their on-time delivery rates, quality of work, and any past performance issues or awards. This context helps assess their capability to successfully execute the H-53 modification task order and provides insight into potential risks associated with their performance.

How does the $21.4 million contract value compare to industry benchmarks for H-53 helicopter modifications?

Determining the precise value benchmark for H-53 helicopter modifications is complex due to the specialized nature of the work and the variability in modification scope. However, the $21.4 million figure can be contextualized by comparing it to other awarded contracts for similar heavy-lift helicopter upgrades or major maintenance overhauls. Factors such as the specific modifications (e.g., avionics, structural, performance enhancements), the number of aircraft involved, and the contract type (Cost Plus Fixed Fee in this case) significantly influence cost. Without access to detailed cost breakdowns or a comprehensive database of comparable H-53 modification contracts, it's difficult to definitively state if this represents excellent, fair, or questionable value for money.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for helicopter modifications?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Adams Communication & Engineering Technology, Inc., is the potential for cost escalation. While the contractor is reimbursed for allowable costs, the fixed fee provides a profit incentive. If the contractor's costs exceed initial estimates, the government bears the burden of these increased expenses. This contract type can reduce the contractor's incentive to control costs rigorously, as their profit is fixed regardless of the final cost. Effective oversight, detailed cost tracking, and clear definition of work are essential to mitigate these risks and ensure the government receives good value.

How does the 'Full and Open Competition' classification impact taxpayer value for this contract?

A 'Full and Open Competition' classification is generally beneficial for taxpayers because it theoretically maximizes the pool of potential bidders, fostering a competitive environment that drives down prices and encourages innovation. However, the actual benefit hinges on the number of bids received and the effectiveness of the government's evaluation and negotiation process. If only a few bids were submitted, or if the evaluation criteria were not robust, the competitive advantage might be diminished. Without knowing the number of bidders, it's challenging to quantify the precise taxpayer savings achieved through this competition method for the $21.4 million H-53 modification contract.

What is the historical spending trend for H-53 helicopter modifications and related engineering services?

Historical spending on H-53 helicopter modifications and related engineering services within the Department of Defense is likely substantial, given the platform's long service life and critical role. Analyzing past spending patterns would reveal whether this $21.4 million award is consistent with previous investments, indicative of an increase in modernization efforts, or part of a larger, multi-year sustainment strategy. Trends might show cyclical spending tied to major upgrade programs or consistent annual outlays for maintenance and minor modifications. Understanding these historical patterns provides context for the current contract's significance and potential future spending.

What are the implications of the contract duration (1136 days) on program oversight and risk management?

A contract duration of 1136 days (approximately 3.1 years) for helicopter modifications necessitates a robust and sustained program oversight strategy. This extended period increases the potential for scope creep, changes in requirements, and evolving technological landscapes. Effective risk management requires continuous monitoring of contractor performance, budget adherence, and technical progress. The government must maintain consistent communication channels and establish clear milestones and deliverables to ensure accountability throughout the contract lifecycle. Failure to provide adequate oversight over such a long duration could lead to cost overruns, schedule delays, and suboptimal outcomes.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 11637 TER DR STE102- 201, WALDORF, MD, 20602

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $32,035,399

Exercised Options: $32,035,399

Current Obligation: $21,438,959

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T10DD420

IDV Type: IDC

Timeline